“The most widely available measure of underemployment is the share of involuntary part-time workers in total employment. This column argues that this does not fully capture the extent of worker dissatisfaction with currently contracted hours. An underemployment index measuring how many extra or fewer hours individuals would like to work suggests that the US and the UK are a long way from full employment, and that policymakers should not be focused on the unemployment rate in the years after a recession, but rather on the underemployment rate. ”

“Figure 2 shows our estimates for the UK of the number of desired hours of those who want more hours (the underemployed) and those who want less (the overemployed) at the going wage. The latter series was broadly flat until recently but was always above the fewer hours series before 2008. That suggests there is still a good deal of under-utilized resources in the labour market available to be used up before the UK reaches full-employment. There has been a rise both in the number of hours of those who want more hours and those who want less in the post-recession years. ”